Hoover set to lose pounds 20m over free flights fiasco: Task force moves in to sort out chaos after three top executives are fired

HOOVER FIRED three top executives yesterday after admitting that its ill-fated and controversial free flights offer will lose it at least pounds 20m.

The company's US owners meanwhile sent a task force into Hoover's South Wales headquarters with orders to clear up the wreckage from the sales promotion that succeeded beyond its wildest dreams.

Under the offer anyone buying a Hoover product costing more than pounds 100 was eligible for two free return air tickets to the US or Europe. Customers purchasing the cheapest qualifying product, a pounds 119 vacuum cleaner, could receive two tickets to New York, costing Hoover more than pounds 500.

The company appears to have gambled on people being put off by the small print attached to the offer. But it underestimated the tenacity of the buying public when confronted with such a gift horse.

Hoover refused to say how many customers had entered the promotion or what the total bill would be. According to some estimates, however, up to 100,000 people may have applied for free tickets - suggesting that the cost will be much higher than pounds 20m.

The company is negotiating with British Airways to buy up to 20,000 extra tickets on scheduled flights to New York and European destinations to meet its commitments.

The promotion was at the centre of controversy almost from the minute it was launched last August, with customers flooding into shops selling Hoover products but then finding it difficult in some cases to obtain their free flights. Labour called on the Department of Trade and Industry to investigate while trading standards officers in Mid-Glamorgan, where Hoover's Merthyr Tydfil head offices are based, received more than 300 complaints.

Although the offer ceased at the end of January, customers may apply to travel on flights any time up to next April.

Many consumers bought Hoover products they did not want simply to obtain free flights. The result was a flourishing second-hand market in brand new domestic appliances still in their boxes.

In a statement issued last night Maytag Corporation, Hoover's US parent, apologised to its customers and said the offer, available in the United Kingdom and Ireland, had led to 'tremendous difficulties plus significant unanticipated costs'.

Leonard A Hadley, chairman of Maytag, said: 'These promotions were flawed and we are taking strong steps to rectify the situation. We regret the inconvenience it has caused Hoover customers in the United Kingdom and Eire.'

The executives dismissed yesterday are William Foust, managing director of Hoover Limited and president of Hoover Europe, and the two directors most closely involved with the promotion - Brian Webb, Hoover vice-president of marketing, and Michael Gilbey, director of marketing services.

Maytag, which owns a string of other domestic appliance brands in the US, said that a reserve set up to cover the cost of the promotion would not be enough, forcing it to take a one-off charge against first quarter profits of dollars 30m to cover extra costs.

When the ill-fated promotion was launched Hoover calculated it could buy all the tickets it needed cheaply through charter operators. However, Maytag said the travel operators retained by Hoover were unable to fulfil their contractual responsibilities in the light of demand.

A variety of hurdles were put in the way of customers. Receipts and application forms had to be sent off within 14 days; after that would-be travellers had to go through a lengthy procedure of nominating airports, dates and destinations.

Hoover also required customers to book accommodation and insurance through affiliated travel companies. Customers who booked separately were given the tickets only when they produced receipts.

According to a BBC1 Watchdog programme to be broadcast next Monday the travel company organising the offer, Free Flights Europe, used a system known as 'wising' deliberately designed to dissuade customers from taking up their free flights unless they spent at least pounds 300 on extra services such as car hire or insurance.

News
people
News
Michael Buerk in the I'm A Celebrity jungle 2014
people
News
news

Lincoln MP Karl McCartney 'denied all knowledge' of the Twitter activity

News
The author PD James, who died on 27 November 2014
people

Detective novelist who wrote Death comes to Pemberley passed away peacefully at her home, aged 94

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
filmDirector said film would 'never have been financed' with ethnic minority actors in key roles
Life and Style
View of champagne glasses at a beach bar set up along the Croisette during the 66th edition of the Cannes Film Festival in Cannes on May 17, 2013
food + drink(and for now, there's a clear winner)
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Avatar grossed $2.8bn at the box office after its release in 2009
filmJames Cameron is excited
Arts and Entertainment
Jennifer Lawrence as Katniss Everdeen in The Hunger Games: Mockingjay Part 1
arts + ents
Life and Style
tech

Sites using the popular Gigya comment platform were attacked by the Syrian Electronic Army (SEA)

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Visitor Centre - Attraction Manager

£50000 - £55000 per annum: Recruitment Genius: For the first time in its 1,000...

Recruitment Genius: Air Conditioning Service and / or Installation Engineers

£27400 - £33500 per annum: Recruitment Genius: Full time air conditioning, ven...

Recruitment Genius: PHP Web Developer

£20000 - £40000 per annum: Recruitment Genius: This leading provider of web an...

Recruitment Genius: Class 1 Driver

£12 per hour: Recruitment Genius: Our Client has been the leader in the events...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?